An increase in the BOJ liquidity requirements has caused Jamaica's leading banks (NCB, Scotiabank, First Caribbean, First Global) to increase lending rates by as much as 2.5 percentage points. In combination with the effects of the sliding dollar, businesses say this move has created an increasingly difficult operating environment in which credit is not only hard to find, but those who are able to qualify for loans face much harsher terms.
The NHT has said that there is no cause for concern, however with this latest increase in rates, along with a general cost of living increase due to local currency depreciation, we are not sure how mortgage holders will respond. America is reeling from their sub-prime mortgage crash which was driven largely by payment defaults due to rate increases on adjustable rate mortgages. We had our own financial sector fallout in the 1990's. Are we going to see another Finsac soon?